Internet Sales Tax Law May Pass Soon

July 18, 2012byDaniel Ford

Passage of a law that would require e-tailers to collect sales tax appears increasingly likely, according to Jewelers of America’s legislative counsel.

“There appears to be a paradigm shift in terms of support,” says Chris Fetzer, vice president and general counsel of Haake & Associates, the Washington D.C.–based legislative counsel for the group, which supports legislation that would require online sellers collect sales tax. “We have reached a critical juncture. It’s no longer a matter of if, but when.”

He notes that while online sales tax bills have been introduced many times, the idea is for the first time starting to win bipartisan support.

“In the past, individual Republicans have championed this federal legislation alongside Democrats,” he says. “But broad Republican support, like we see now, especially at the gubernatorial level, has been rare.”

Fetzer thinks that the legislation will pass either late this year or sometime next, but not likely as a standalone bill.

“It will likely be attached to a larger legislative vehicle,” he says. “Members will want the political cover that a larger legislative vehicle will provide them.”

The two bills currently in the House and Senate both exempt small businesses from sales tax collection, though they define “small businesses” differently.

Still, Fetzer calls those provisions “a critical part of this legislation.”

“The authors of the legislation do not wish to impose any new collection burdens on genuine small business,” he adds.

The largest jewelry dot-com, Seattle-based Blue Nile, did not respond to a query from JCK. However, the company has said that passage of an online sales tax would “significantly decrease [its] future net sales.”

Jewelers can notify their Congressional representatives about their feelings on the issue through JA’s Legislative Action Center.